THE Government today confirmed that it is launching a full inquiry into events at troubled life assurer Equitable Life....

THE Government today confirmed it was launching a full inquiry into events at troubled life assurer Equitable Life.

The inquiry would be headed by Lord Penrose, who would examine the circumstances leading to the current situation at the mutual, said Economic Secretary to the Treasury Ruth Kelly.

Lord Penrose would go back "many years, even decades" to identify any lessons that could be learned for the "conduct, administration and regulation of life assurance", she said.

A Treasury spokesman said the "independent" inquiry would make as much information public as possible.

But the inquiry would be held in private because much of the information would be market sensitive.

The Financial Services Authority City watchdog is already investigating events at 240-year-old Equitable Life from January 1999 until December 8 last year, when the mutual closed for new business.

But policyholder action groups have put pressure on the Government to launch a full inquiry into events before 1999, when the life assurance industry was regulated by the Department for Trade and Industry and, during 1998, by the Treasury.

The Treasury spokesman said it was up to Lord Penrose how far back he went with the inquiry, but it was thought he will look at events in the 1950s, when Equitable first started selling guaranteed annuity rate (GARs) policies.

Ms Kelly said the Government had carefully considered the concerns of policyholders and representative bodies in deciding to launch an inquiry.

"Equitable Life raises important issues which deserve consideration by a full independent inquiry," she said.